Regulatory and Permitting Information Desktop Toolkit

Under the Federal Power Act (FPA) the Federal Energy Regulatory Commission (FERC) may grant licenses for hydropower projects on Bureau of Reclamation (BOR) dams that have not been reserved for federal hydropower development. When a FERC licensed project is located on a BOR dam, section 4(e) of the FPA authorizes the BOR to impose mandatory conditions in the FERC license (16 U.S.C. § 797(e)). In addition, section 4(e) requires FERC to license only those projects that it finds are not inconsistent and do not interfere with the purpose for which the federal reservation was created.

Any non-federal project developed on a BOR facility must not impair the efficiency of BOR generated power or water deliveries, jeopardize public safety, or negatively affect any other BOR project purpose. For these reasons, oversight of the non-federal projects is necessary to ensure these conditions are met. Oversight is administered through the Federal Energy Regulatory Commission (FERC) License conditioning requirements.

7-FD-n.1 to 7-FD-n.3 – Will the Proposed Project be Located on a Bureau of Reclamation (BOR) Facility?

For hydropower projects proposed to be located on a BOR facility, the BOR will develop and submit to FERC a “4(e) Report” containing mandatory conditions to attach to the FERC license. In addition to mandatory conditions, where necessary the BOR will develop and include recommendations under section 10(a) of the FPA (see 16 U.S.C. § 803(a)).

The BOR will initiate its section 4(e) analysis after FERC issues a Notice of Acceptance of Application under 18 CFR 4.32(g). In response to the notice, the BOR will submit a 4(e) Report containing mandatory conditions. Below is a list of common conditions that BOR requires attach to a FERC license:

Article 1. No later than 60 days after issuance of a License, the License Holder shall contact the Regional Director, Bureau of Reclamation (Reclamation), to ascertain the necessary coordination of its plans and any agreements required by Reclamation for access to and site activities on lands and maintenance of the project so that the physical structures and authorized purposes, including operations, safety, integrity, and environment of the Federal facility or reservation are protected. In general, the construction, operation, and maintenance agreement shall identify the facility, the applicable study and construction activities and schedule, and terms and conditions under which the studies and construction shall be conducted. The agreement shall include, but not be limited to, the following items:

reasonable arrangements for access to the Federal facility or reservation to conduct studies and construction activities, such access to be conditioned by Reclamation as may be necessary to protect the Federally authorized project proposes and operations;

charges to be paid by the License Holder to Reclamation for

(a) technical studies conducted by Reclamation that relate to the structural integrity or operation of the Federal facility associated with hydropower development,

(b) review of designs including plans and specifications and proposed operations,

(c) construction inspections based on personnel costs, where such reviews and inspections are directly related to the structural integrity or operation of the Federal facility or reservation,

(d) provisions for repayment of any damages occurring to Federal lands and structures,

(e) coordinated operating expenses,

(f) copies of reports, drawings, and similar data based on printing and mailing costs, and

(g) the value of the right of use of Reclamation land and all associated administrative costs incurred by Reclamation, provided, that charges shall not be assessed for information or services that would normally be provided to the public; and

operation and maintenance plan for the exempted project that addresses coordination with Reclamation and payment of any costs incurred by Reclamation.

Article 2. The design and construction of those facilities that would be an integral part of, or could affect the structural integrity or operation of the Federal reservation shall be done in consultation with and subject to the review and approval of Reclamation. The design drawings shall be approved by Reclamation at intervals determined by Reclamation. Four sets of design drawings, specifications, and design computations shall be forwarded at each interval to the Regional Director, Bureau of Reclamation. Additional sets may be requested. Any subsequent changes in the design and construction of the project must be approved by Reclamation prior to implementation.

At the completion of construction, the License Holder shall prepare and submit to the Regional Director, one complete set of as built drawings of the project in Mylar or other durable reproducible form and in electronic format acceptable to Reclamation, complete specifications with all amendments, and any design data and construction records, technical operation and maintenance manuals, and the final construction report as determined necessary by the Regional Director.

Article 3. The construction, operation, and maintenance of the project works and project investigations related to hydropower development, as determined by Reclamation, must not weaken, damage, or affect the structural integrity or operation of the Federal facilities or reservation, or reduce or impair the capability to provide for the purposes or services of the Federal reservation, or negatively affect the Federal governments ability to fulfill its trust responsibility to Indian tribes, and shall be subject to periodic or continuous inspections by Reclamation as appropriate. Any construction, operation, or maintenance deficiencies or difficulties detected by Reclamation will be immediately reported to the License Holder and the Commission’s Regional Engineer. Reclamation shall report to the Commission’s Regional Engineer the need to stop construction, operation, or maintenance while awaiting resolutions of any deficiency that would affect the structural integrity of the Federal facilities. In those cases when a construction, operation, or maintenance practice or deficiency may result in a situation that would or could endanger the structural integrity, environmental quality, safety, operational commitment of the Federal facility or reservation, or Indian water rights fulfilled by the system, Reclamation shall have the authority to stop construction, operation, or maintenance activities until the problem or situation is resolved to the satisfaction of the Department. Operation of the Project shall be secondary to the purpose, including operation and maintenance, of the Federal project or reservation as well as the fulfillment of Indian water rights.

Article 4. Unless otherwise specified by Reclamation, all newly directed land areas shall be revegetated by the License Holder with plant species indigenous to the area with 6 months of completion of project construction.

Article 5. The License Holder shall have no claim against the United States arising from any future changes made to meet authorized Federal purposes, from the effect of any changes made in releases from or operation of the Federal facility or reservation, from modifications resulting from dam safety requirements, or from any changes in canal levels and/or flows of the Reclamation project resulting from the exercise of Federal purposes or trust responsibilities.

Article 6. The License Holder shall recognize the primary right of any Reclamation’s project activity or the fulfillment of Indian water rights, either by Reclamation or by its constructors or both, associated with the Reclamation project, its appurtenant facilities, access roads, operation, and maintenance.

Reclamation project activities and the fulfillment of Indian water rights, whether ongoing at, or initiated subsequent to the start of work by the License Holder, take precedence over the licensed project activities.

Article 7. The License Holder shall provide the Commission’s Regional Engineer two copies of all correspondence between the License Holder and the Bureau of Reclamation. The Commission’s Regional Engineer shall not authorize construction of any project works until Reclamation’s written approval of construction plans and specifications has been received by the Commission’s Regional Engineer.

Article 8. The License Holder shall provide Reclamation the opportunity to review and approve the final plans and design of contractor designed cofferdams, and blasting, and deep excavations prior to the start of construction and shall ensure that construction of cofferdams and deep excavations are consistent with the approved design. Reclamation’s review of the cofferdam will be in addition to the License Holder’s review and approval of the final plans and shall in no way relieve the Licensee of the responsibility and liability regarding satisfactory performance of the cofferdam. The cases where Reclamation review is required, the Licensee shall submit copies of the design data, computations, drawings, and specifications for the cofferdam to the Regional Director at a time which allows a sufficient review period prior to construction. The Regional Director will inform the License Holder of the required number of submittal copies and the Reclamation review period.

Article 9. The timing, quantity and location of water releases and release changes from the facilities will be at the sole discretion of Reclamation. Reclamation does not agree to alter operations or maintenance of the Federal reservation or facilities or any associated Federal Reclamation project for the benefit of power generation. Reclamation does not in any manner guarantee any quality or quantity of water for the hydroelectric project and is under no obligation to construct or furnish water treatment facilities to maintain or better the quality of water.

The License Holder agrees not to claim damages for loss of hydropower production as a result of Reclamation’s operation for authorized project purposes including but not limited to flood control, irrigation, municipal and industrial use, recreation and fish and wildlife, as well as fulfilling Indian water rights.

Article 10. The Licensee is advised that any hydroelectric facilities and associated components which are located on lands under the jurisdiction of the Bureau of Reclamation may only be used for the authorized construction, operation, maintenance, repair, and replacement of such facilities as specifically granted to the Licensee by the Federal Energy Regulatory Commission. The Licensee is expressly prohibited from using Bureau of Reclamation lands for any other purpose not in accordance with its license, and the provisions of this section. The Licensee is also prohibited from issuing any Licenses, licenses, easements, leases, or granting any type of use authorization to, or entering into any type of verbal or contractual agreement with third parties allowing the temporary or permanent use of Bureau of Reclamation lands not directly associated with licensee’s operation and maintenance of its authorized facilities.

In addition, under FPA section 10(a), the BOR may provide recommendations to FERC in its 4(e) Report. Whereas 4(e) conditions are mandatory, 10(a) recommendations are not mandatory and FERC has discretion whether to condition the license based on 10(a) recommendations. The BOR will develop 10(a) recommendations on a project-specific basis to ensure the protection of the BOR facility.

7-FD-n.4 to 7-FD-n.6 – Will the Proposed Project Affect a BOR Facility?

When a FERC licensed project is not located on a BOR facility, but will affect a BOR facility, the BOR will make project specific recommendations to FERC under section 10(a) of the FPA. In these instances, the BOR will intervene in the licensing proceeding by submitting 10(a) recommendations to FERC. Whereas 4(e) conditions are mandatory, 10(a) recommendations are not mandatory and FERC has discretion whether to condition the license based on 10(a) recommendations. The BOR will develop 10(a) recommendations on a project-specific basis to ensure the protection of the BOR facility.

7-FD-n.7 – Continue with FERC Licensing Process

If the project is not proposed to be located on a BOR facility and will not affect a BOR facility, then the BOR will not submit a 4(e) Report or 10(a) recommendations.

7-FD-n.8 to 7-FD-n.13 – Does the Developer Seek to Challenge a Disputed Issue of Material Fact?

Section 241 of Energy Policy Act of 2005 (EPAct 2005) amended section 4(e) of the Federal Power Act to provide that any party to a license proceeding may seek a determination on the record, after opportunity for an agency trial-type hearing of no more than 90 days, of any disputed issues of material fact with respect to any agency’s mandatory conditions (see 43 CFR 45.20 et seq.). To request a hearing, a written request must be filed within 30 days after the deadline for submitting preliminary conditions to FERC (43 CFR 45.21). Additional content requirements for written requests for a hearing can be found at 43 CFR 45.21.

After receiving a written request for a hearing, and within 45 days of the deadline for submitting preliminary conditions, the BOR will file an answer (43 CFR 45.24). Within 5 days of receipt of the answer, the Office of Environmental Policy and Compliance (OEPC) refers the case for hearing either to the Department of the Interior’s (DOI) Office of Hearing and Appeals or to the hearings component of another department (43 CFR 45.25). If the case is referred to the DOI, the hearing process will be governed by 43 CFR 45.1 et seq.; if OALJ, governed by 7 CFR 1.630 et seq.; and if DOC, governed by 50 CFR 221.1 et seq..

7-FD-n.14 to 7-FD-n.17 – Does the Developer Seek to Propose any Alternative Conditions?

Section 241 of EPAct 2005 added section 33 to the Federal Power Act allowing the license applicant or any other party to the licensing proceeding to propose an alternative condition. To propose an alternative, any party to the licensing proceeding must file a written proposal with the BOR within 30 days after the deadline for submitting preliminary conditions to FERC (43 CFR 45.71(a)(2)). Additional content requirements for written proposal can be found at 43 CFR 45.71(b).

After receiving a written proposal, and within 60 days of the deadline for filing comments to FERC’s NEPA document, the BOR must analyze proposed alternatives and file with FERC any adopted alternatives (43 CFR 45.72). The BOR must file with FERC a statement explaining the reasons for accepting or rejecting any alternatives and the basis for any modified conditions to be included in the license. The BOR must accept the proposed alternative if it determines, based on substantial evidence that, (a) the alternative condition provides for the adequate protection and utilization of the reservation, and (b) the alternative will either cost significantly less to implement or result in improved operation of the project works for electricity production (43 CFR 45.73).